If you get paycheck early or every two weeks, you may be familiar with the feeling of counting down the days until your next paycheck clears—and then spending it almost as quickly as it comes in. The good news is that with the advances in banking technology over the past few years, it has become easier to access your paycheck early and free up some much-needed cash in your checking account. However, before you think about how to get your paycheck early, there are several things you should know about how exactly that process works.
The Speed at Which Banks Process Automated Payments
Banks can process electronic payments much faster than paper checks. Automated payments are typically processed within one to two business days, while paper checks can take up to five business days. This speed advantage is one of the main reasons online banking can provide early paycheck clearing.
The Speed at Which Banks Process Manual Payments
One of the main reasons that online banking can help you get your paycheck early is the speed at which banks process manual payments. If your employer can send your payment electronically, it will likely arrive in your account much faster than if they had to mail a paper check. Additionally, some banks now offer early direct deposit for their customers, which means you could get access to your funds even sooner.
The Sequence With Which You Submit Deposits
If you have online banking, there’s a good chance you can get your paycheck up to two days early. Here’s how it works: When your employer sends your direct deposit to your bank, the funds are typically available on the next business day. But if you submit your deposit early in the day, your bank may make the funds available that same day.
The Frequency of Large Deposits
If you frequently have large deposits, such as your paycheck, you’re more likely to get early access to those funds. That’s because the bank can see that you’re consistently depositing a significant amount of money, and they want to keep you happy.
How Long you have Lived in your Home Address
Your home address is one of the most important pieces of information used when verifying your identity. The longer you have lived at your current address, the more likely it is that you will be able to get your paycheck early.
How your Bank Handles Overpayments
If you’ve ever accidentally been overpaid, you know how frustrating it can be to get the money back from your bank. It’s an even bigger hassle if you’re self-employed and use cash to pay contractors because then you have to wait for them to submit a refund request. That’s why many banks offer overdraft protection, which covers transactions with insufficient funds as long as they’re less than your overdraft limit (usually around $500). But for this protection plan to work, you need enough funds in your account when it comes time for payday.
The Fees Charged by the Company That Pays your Wages
Companies charge a few different types of fees to offer early paycheck clearing. The first is an ACH fee, a flat fee charged by your employer’s bank to send the funds to your account. According to experts at SoFi, this fee is typically around $5. The second type of fee is a per-transaction fee, which is a percentage of the total amount being deposited into your account. This fee is typically around 1% of the total deposit amount.
Online banking is a great way to get your paycheck early. However, there are a few factors that can cause delays. These include errors in the system, incorrect routing numbers, and insufficient funds.